Sunday, January 30, 2011

After 30 years in business, Island Video decided to pack it in earlier this month, shutting down its one remaining location, the Madison Park store at 3109 E. Madison Street. We overlooked the closing, which was brought to our attention by MPB reader Kent Edebohls, who sent us a photo of the notice from Island Video owner Kent Smith posted on the door.

In the notice, Smith stated that negotiations with the landlord over a lease extension had been unsuccessful. He noted that the landlord had given Island Video rent reductions over the past two years, but that "the current level of business no longer supports the high costs of operating in the Madison Valley/Park area."

Film fans in our neighborhood had been among IslandVideo's most loyal customers, keeping this location going long after the Company's stores in other neighborhoods around town were shuttered. But the business model was simply no longer in tune with the times, given Netflix, Redbox and the numerous online video-streaming options now available. Sadly for some, the neighborhood movie-rental store has now gone the way of the neighborhood bookstore.

A couple of other businesses in the area have also decided to close shop in the last few months. Near the end of last year, Suess Chocolates in Madison Valley shut down, seemingly overnight. When it opened in 2009 we wondered, rather indirectly, if the neighborhood really needed another chocolate shop. It may be that the market provided the answer, though no reasons for the closing were given to Suess Chocolates' Facebook fansbefore the page was, like the store, suddently terminated.

Another business which recently closed in Madison Park was Aree Perlman at 4031 E. Madison St. (next to Scoop du Jour). Opened in 2004 by Ruth-Ellen Perlman, a former Microsoft communications executive, the store offered a small selection of contemporary and antique fine jewelry. Perlman held a final sale, thanked her patrons, and closed the business earlier this month. The space now houses Get Young MD, the rejuvination clinic of Dr. Teri Burnett, which had previously been located in Spa del Lago.

Well, it’s not quite a sinkhole, and—assuming the City finally gets around to filling it in—it probably doesn’t really have the potential to collapse The Edgewater, which is just across the street. But this pothole at the intersection of 42nd Avenue E. and E. McGilvra Street has certainly become a major pedestrian and bicycle hazard in recent months. Vehicle drivers also need to take caution when approaching the intersection, since the barricades the City has placed there are routinely knocked onto ground by passing trucks and busses, thereby adding to the accumulated danger of this particular depression.

The situation was brought to our attention a week ago or so by MPB reader Peter Davidson, who requested that we mention the problem and provide a link to a website, SeeClickFix, which has as its raison d’être bringing citizen concerns to the attention of government. In theory, according to Davidson, the more people who go to SeeClickFix to look at the page listing the 42nd and McGilvra issue, the quicker the City will be in fixing the pothole. Perhaps.

Or, more likely, the City will be fixing this pothole when it’s good and ready to. A recent article in The Seattle Times notes that at the end of last year the City had reports of 1,200 potholes that had yet to be investigated and repaired. Although the number of SDOT’s pothole-fixing crews has been increased from three to nine, our several-feet-wide, several-inches-deep pothole has yet to make it to the top of the repair list. But we may be moving up. Last week someone, presumably from the City, painted a bunch of incomprehensible markings on the street at the site.

So far, there have been 117 views of the relevant fix-this-pothole page on SeeClickFix. As a result of these views SeeClickFix notes that it has sent emails about the problem to “Seattle Times pothole reports” and to the “Department of Neighborhoods East District.” We hope that last one is not the office recently shut because of budget cuts.

[Thanks to The Laurelhurst Blog for bringing the pothole article in The Seattle Times to our attention. As the blog notes, the SDOT has an on-line form for reporting street problems, including potholes. To access it, click here. There is also a pothole and street repair hotline number listed there.]

Wednesday, January 26, 2011

It’s been a tough month for the denizens of 39th Avenue E., in the area north of E. Madison St. Only one such crime was deemed worthy of posting on the Seattle Police’s neighborhood crime map (above), but residents say that officers told them there’s been a recent “rash of burglaries” in the area. The one getting the most attention is a break-in at a house on the 2200 block of 39th on January 19. The resident came home at about 6:00 that evening to find that her front door was open; and without entering the house she could see that drawers were open and that a window had been broken. She called the police, who soon arrived and “cleared” the house (meaning they made sure no bad guys were still on the premises). The homeowner later discovered that a laptop and checkbook had been stolen, along with other items. No suspect has been identified, and it appears that the robber(s) wore gloves while committing this crime.

Naturally, neighbors have become wary, especially because there have been sightings of suspicious characters in the neighborhood. A recent block-watch email reports that a resident discovered a guy wandering around various neighbors’ backyards. When confronted, the interloper claimed to be looking for a place to wash his hands. Meanwhile, the police have asked residents to be on the lookout for a silver 1990’s four-door Buick (or a similar car) with a temporary license posted in the back window. The car has apparently been fingered as a suspect vehicle.

The only other area crime posted by the police to the official crime map is the incident involving this wheel-challenged Mini Cooper, shown here parked near the intersection of Madison and 39th.

MPB reader Ken Myrabo pointed this out to us. He says that the car’s owner told him that the perpetrators, after jacking up the car and removing the wheels in the dead of night, were considerate enough to lower the car onto some rocks they had brought along for the purpose, thus preventing damage to the car’s disc brakes. Nice guys! And all of this while working their crime within clear view of the neighborhood’s major arterial, too.

Crime did occur in other areas of the Park over the past week as well. One burglary took place on the 1500 block of 41st Avenue E. during the evening of January 6. No details have been provided. There was one case of trespassing reported, this on the 1800 block of McGilvra Boulevard E. on January 20. A realtor reported discovering that someone was apparently squatting at a vacant house that she has listed for sale on that block. While inspecting the house, she said, she noticed food wrappers and cigarette butts at various locations, not to mention (although we are obviously mentioning it) urine in the toilets!

A theft occurred on the 1000 block of 37th Avenue E. on January 22 and cases of property damage were reported on the 1800 block of McGilvra Boulevard E. on January 13 and the 1300 block of Lake Washington Boulevard E. on the same day. As always, cars were broken into, one on the 1600 block of McGilvra Boulevard E. during the morning of January 7, and one on the 3100 block of E. Madison St. on the evening of January 23.

Friday, January 21, 2011

The Madison Park real estate market was sizzling in December, with 16 sales recorded during the month. That’s double the sales activity of the previous month and bigger volume than existed at the height of the spring selling season last year, when 11 homes were sold each month on average. December’s sales were 80% higher than for December 2009.

Did the year ended on a fluke, or should we regard it as the precursor of good things to come? Unfortunately, at this point there are only seven home sales pending, which may make it tough for January to measure up to the December standard. Even so, sellers can still take heart from the fact that 2010 as a whole was a significantly better year for sales than any of the three previous years. And it’s now clear that at least in terms of sales activity the market is making a comeback. There were 104 sales of single family residences and condos in Madison Park during 2010, a 39% increase over the previous year’s total. House sales were up a whopping 48% year over year, while condo sales increased by a more modest 18%.

Here’s how December played out in Madison Park (Washington Park and Broadmoor included), based on sales data from the Northwest Multiple Listing Service (MLS):

The median sales price of houses sold in December, at $1,227,000 million, was directly in line with the median price of all of the houses sold in 2010: $1,225,000. This is a 17% decline in the median price since the height of the market in 2007. The median price of condos, however, has held up much better, declining just 8% over the past four years. In terms of year-over-year decline, the median value of houses sold in Madison Park was down a modest 4% between 2009 and 2010:

As we always caution, Madison Park is a pretty small market, so these median prices may not reflect the actual decline in value of any particular house or even represent an average decline in values for the neighborhood as a whole. It’s more a question of which houses are selling in any given period; and as we know, the bottom end of the market has been much more robust than the upper market has been since the downturn. Windermere Real Estate’s Kathryn Hinds, one of the top agents in the market, says she thinks that house values have declined only 10-15% in Madison Park since the peak. “I feel we have seen a stabilization of home values and that we will continue to see a steady stream of sales in our neighborhood,” she tells us. She cites the Park’s proximity to downtown, the attractiveness of lakeside living, and the charm of The Village as chief selling points for the neighborhood.

Windermere’s Laura Halliday agrees that the market seems to have bottomed out. She notes that during 2010 buyers seemed to feel more confident that the market was not going to continue sliding, or at least came to believe that the rate of decline had leveled off. That, coupled with sellers being more pragmatic about pricing and buyers being able to finance at historically low interest rates, she says, resulted in a lot more sales.

Shockingly, the average discount from list price during December was a very high 13.8%, but this was the result of an anomaly. One house that changed hands during the month had originally been listed for sale at $1,900,000, but it sold for only $880,000, a 46.3% discount. With this outlier removed, the discount was only 5% for the other houses which were sold. And that’s based on initial list prices, not the list prices that existed after successive price reductions may have been incurred. The MLS numbers compare final list prices to sold prices, and by this measure the trend was is positive for sellers. There was an average discount of a hefty 11% suffered by house sellers in 2009, but this declined to 7.1% in 2010. Condo sellers also saw improvement, from a discount of 7.5% in 2009 to 5.6% last year. Nevertheless, that’s still well in excess of the low discounts experienced at the height of the market.

Another trend favorable to sellers is the average days on market for sold properties. From a low of only 78 days in 2007 to a high of 182 days last year, things definitely moved in the right direction for condo sellers during 2010. The time on market for sold houses also improved.

Madison Park’s real estate market seems to be out of sync with the City’s market overall. December sales were down almost five percent in Seattle, year over year, and listings rose by only 2.3%. Listings in Madison Park, meanwhile, are actually up 17% compared to the same point last year.

Based 2010 sales levels, the 75 current listings provide the market with only a nine-month supply of inventory. That’s dramatically down from the high point of 116 listings during the summer or 2009, when only five or six houses were being sold each month. The brutal 19-month absorption rate of those down months is something that sellers and realtors can apparently now call ancient history.

[Photo above: This house at 1820 41st Ave E., a listing of Windermere Real Estate broker Cathy Millan, was priced at $449,000 and sold (pending inspection) just five days after going on the market. It provides evidence that a well-priced house that is well presented can move fast in the current environment, says Millan.]

Sunday, January 16, 2011

In Madison Park’s early days this was very much a beach community, with lakeside amenities including a boardwalk, a bandstand, bathing pavilions, boathouses, and a ball park. In the late 1800s and well into the early 1900s, the centerpiece of Madison Park entertainment was a large Victorian structure on the Lake known as the Madison Street Park Pavilion. The photo above, from the Seattle Municipal Archives, was probably taken around the turn of the century. The caption on the marquee is “Madison Park Theatre.” In her book, Madison Park Remembered, longtime Madison Park resident and author Jane Powell Thomas states that the Pavilion's auditorium seated 500 and there was outdoor seating for hundreds more. Another major feature of the building was its large covered observation deck at the top.

The photo below, from the UW Libraries Collection, taken around 1890 by photographer Arthur Churchill Wallace, shows the structure from the beach side. The photo is labeled “Seattle Pavilion at Laurel Shade, Lake Washington.” Laurel Shade was the name of the estate of Madison Park founder John J. McGilvra, to the south. The beach community was apparently known as Laurel Shade until McGilvra donated a large section of his Lakefront property for a park, initially known as the Madison Street Park, later shortened to just Madison Park.

This photo by Wallace, also from the UW Libraries Collection, shows the entrance to the Pavilion.

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Below is a great shot from the Seattle Municipal Archives showing the “Meiers Band” standing in front of the Madison Street trolley car, with the Pavilion clearly visible in the background. Based on this photo it’s evident that the Pavilion was located just to the south of Madison Street, two blocks north of McGilvra’s Laurel Shade compound (now known as the Reed Estate). According to author Jane Powell Thomas, the Madison Street Cable Railway was the builder and owner of the Pavilion. McGilvra had donated 21 acres of waterfront property to the Cable Railway to induce the Company to run the trolley line from the top of Capitol Hill to the Lake, she says. It was the Cable Railway that initially developed Madison Park "for the mutual economic benefit of the McGilvras" and itself. Thomas lists 1889 as the date the cable car began running to Lake Washington and 1890 as the date the Pavilion was completed. The structure burned to the ground in 1914.

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Down on the water there were three compatible and elaborate “bathing pavilions” or “bandstands,” depending on which caption you believe. Here’s how they looked, circa 1885, in another photo by Wallace from the UW Libraries Collection.

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This picture from the collection of the Museum of History & Industry shows canoeists enjoying a day on the Lake in 1910, with the mini-pavilions in the background.

Here is a great shot (provided to us by MPB reader Don Petit) probably taken around the same time, or perhaps a bit later. It shows the Lake scene looking south from a dock, probably at the end of Madison Street.

This is another shot by Wallace, which shows both the boathouse and two of the bathing pavilions looking south from the landside. Note the wooden boardwalk and swings.

There’s more, but we’ll stop here with this lovely photo shot by an unnamed photographer, circa 1892, showing a steamboat heading out from the Madison Street landing.

[Click on pictures to enlarge. To see all of the MPB postings on the history of Madison Park, including this one, click here.]

Wednesday, January 12, 2011

Readers may recall the dustup we covered earlier this year over the permit requests of two Madison Park property owners who each wanted to short plat (subdivide) their properties. The two applications were coincidentally for different properties located on the very same block. Both of the lots already had two existing longtime rental units on them, and this fact effectively grandfathered the real estate as suitable for short platting under City ordinance, assuming certain conditions were met. The City ultimately approved both applications, in spite of the written objections of many neighbors and the opposition of the Madison Park Community Council (whose letter of protest arrived at City Hall a bit after the fact, as it happened).

As a result of the City’s approval, each of the properties can legally be developed and sold as two separate single-family residences. The owner of one of the properties moved swiftly to do just that. What was originally one lot at 2330 42nd Avenue E. is now two legal lots, 2328 and 2330. This is what the property looked like before the short plat was approved:

The two small cottages that sat on the lot were each in pretty bad condition, according to realtor Theresa Truex of Madison House, Ltd. “They were crummy little see-through cabins, not even remodel-able,” she says. “In fact, the inspector’s comment was ‘You’ve got to tear these down.’” The owner, who originally bought the real estate for its development potential, had initially been planning to build one big house on the site and leave it at that, says Truex. However, the subsequent downturn in the local real estate market significantly changed the economics for speculative Megahouses in Madison Park. The developer rethought his options, and subdividing became an attractive alternative. Developing two smaller, less expensive houses suddenly seemed to offer more market potential—and less risk.

The picture at the top shows what the site looks like today from the street side, and this photo shows how the second house is being positioned:

The new house on the street-side of the property was sold before it was completed, and the owners moved into it in late December. The buyers are a couple that did not want a big property to take care of but wanted to be able to live close to the amenities of Madison Park’s Village, says Truex. The house has about 1,100 square feet of living space and sold for $539,000. The second house, currently under construction on the back of the property, will be completed in early this year. It’s a bit bigger, at around 1,300 square feet; and it will be priced at $769,000. According to Truex, the developer was correct in thinking that some buyers who want new construction prefer “cozy” to Megahouse. It’s unusual to find a small new house anywhere in Madison Park, she notes, and the very quick sale of the first house on this property seems to prove there is an audience for this kind of construction.

.“This development, in my opinion, creates a bright spot in the neighborhood,” says Truex. “Where there had been two run-down houses there are now going to be two attractive, nicely built homes rather than one gigantic house.” She says that neighbors have been very supportive of the project, with many of them coming by to give positive feedback to the construction workers. We checked with two of the opponents of the original short-plat permits on that block, and each said they liked what’s being done with this particular property. The small homes have been “designed and executed in a thoughtful manner,“ one of them told us. The other one-time opponent admitted that the new development fits the character of the neighborhood better than the dilapidated structures that originally sat on the property.

So it appears that this two-cottage development, assuming that the second home is successfully marketed and sold, will ultimately be chalked up as a win/win/win: for the developer, the homebuyers, and the neighborhood. Even so, don’t expect the building of cottages to become a trend in Madison Park. There are not that many properties here that can be legally subdivided, so that old economic rule known as “build to the highest and best use” will continue to influence developers. What that almost certainly means for Madison Park is more Megahouses once speculative building makes its comeback.

Saturday, January 8, 2011

McGilvra shines, but will it always?When the Seattle School District issued its new school rankings late last year, John J. McGilvra Elementary scored at the top, receiving a “5” on a five-level scale. It was a bit of a “no duh” moment. As we previously reported, McGilvra’s students last year significantly outperformed both their City and State counterparts on the newly introduced Measurements of Student Progress (MSP) tests. Because the District’s new school rankings are primarily based on whether a school has a high percentage of students passing the MSP reading and math tests, McGilvra’s showing was essentially pre-ordained. Shockingly, however, McGilvra was one of only 11 elementary schools and one K-8 school in the district to be ranked at Level 5. There are 52 elementary schools and 10 K-8 (kindergarten through 8th grade) schools in Seattle, 13 of which received a “1” ranking.

Why are McGilvra’s students performing so well? One of the reasons, certainly, is the fact that the parents of McGilvra students have taken an increasingly active role in the School’s operations over the past decade, including providing a significant level of private financing to the School. That funding effort began in earnest with the decision by parents in 2000 to fund the purchase of two portables so that McGilvra could have more classroom space and thus reduce class size. At the time the portables were purchased, the School District entered into a twenty-year contract with the McGilvra PTA under which the District agreed to use the new teaching space to reduce class size. The PTA committed to fund the hiring of additional teachers for the School as well as covering the purchase price of the portables.

As a result of the agreement, the McGilvra PTA for the past ten years has been providing a substantial subsidy to the School, one which currently exceeds a quarter of a million dollars annually. This outside funding, according to the PTA, represents about a fifth of the School’s total budget and is sufficient to pay for approximately three classroom teachers. As a result of this support, the School in recent years has been able to staff two classrooms per grade (Kindergarten through Grade 5) with an average of only 21 students in each classroom.

From the point of view of McGilvra’s parents, the contract with the District has worked as intended over its first decade. Now, however, that agreement has been thrown into dispute. The PTA believes that the School District is in violation of the agreement, and the parents have hired legal counsel to help them make their case. At issue is the District’s decision to allow a significant increase in enrollment at McGilvra this school year. The PTA believes that the 10% increase in the student population at McGilvra conflicts with a District commitment to maintain enrollment at no more than 250 students. There were 246 students at the School last year, and there were 270 students enrolled at the beginning of this school year (266 students as of January 1). The biggest increase occurred in the kindergarten class, which went from 39 students in the 2009-2010 school year to 54 students today. The fourth grade class increased from 39 students to 48 students; and all of the other classes also increased in size, except for the third grade, which declined.

The District apparently does not agree that it is obligated by the 2000 contract to maintain enrollment at the 250 student level or below, as the PTA argues. Nor, apparently, does it accept the PTA’s additional contention that by terms of the contract, kindergarten enrollment was not to exceed 20 students per classroom. This year’s kindergarten enrollment is 35% higher than that maximum level.

The PTA stated its position in a letter from its legal counsel to the District in September, following which representatives of the District and PTA met to discuss the situation. At first it appeared that the School District was willing to debate the issue and come to some workable compromise with the PTA (a so-called memorandum of understanding or MOU). However, a December 8 memo from the PTA Board to McGilvra parents makes it clear that the negotiations have broken down. The memo states that “the District’s attorney advised us that he had reviewed our draft MOU with the ‘very top’ officials in the District and the District was no longer willing to enter into any type of meaningful MOU or clarification of our Agreement.”

The memo further states that the District’s attorney told the PTA negotiators that “the District would prefer to terminate the Agreement with the McGilvra PTA altogether.” Since under the terms of the agreement the School District is obligated to repay the PTA for the costs of the portables if it cancels the contract, this would be an expense for the District (estimated at $54,000-$60,000). That’s not much money, however, relative to what the PTA is providing the District on an annual basis. And, as the PTA board notes in its memo, “Obviously, we do not want a $60,000 buy-out. We want to continue our Agreement.”

That, however, appears not to be an option. Given the District’s response, the PTA believes it has limited choices: 1) sue the District, 2) give up and walk away, or 3) “develop a new way forward to make sure McGilvra continues to be a nurturing and wonderful school for our children.” The memo from the PTA board to the parents makes clear that the third choice is the one the PTA is embarking upon. What this means may become evident over the remaining course of the school year, as the PTA works with McGilvra’s Principal, Mary Lane, to determine what McGilvra would look like if there “was not a dime from the PTA.” The purpose of that exercise, says the PTA Board, is to “make sure the PTA is not funding something the District would otherwise be required to fund.” Once that is known, the PTA says it will develop a plan for funding needed programs at McGilvra in future years.

The McGilvra PTA/School District contract was negotiated ten years ago under a previous Seattle Schools administration. Although current School Superintendent Maria Goodloe-Johnson told McGilvra parents at a meeting last January that the agreement with the McGilvra PTA would “for now” remain unchanged, her commitment apparently did not extend into the new school year. In certain quarters there have always been questions of elitism and “fairness” surrounding the concept of a public school in an affluent neighborhood receiving private funds to support the education of children in that school, money that is not made available to the public school system as a whole.

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It seems that the District’s attitude toward this kind of “special arrangement” has changed. The question now is: how will the parents and the School adjust to this new reality? We will explore that issue as the situation at McGilvra is clarified in coming months.

Sunday, January 2, 2011

For several decades the owners of two waterfront properties in Madison Park have taken for their private use the public road end which sits between their two properties. By doing so, they have excluded the public from what is publicly owned waterfront. This encroachment on the public right-of-way, which may have begun in the 1950s or before, was initially accomplished through the planting of hedges and other landscaping across the road end, thereby blocking physical access to the site and effectively eliminating the public’s view of Lake Washington from the roadway.

Although the City became aware of these illegal encroachments late in the last century, it has not required either that the obstructions be removed or that the waterfront be returned to public use. Ironically, the unsanctioned action of the former owners of these two properties in blocking off the road end provides the current owners with the ongoing right to keep out the public. Because this road-end encroachment has been “grandfathered” under current City rules, all that the abutting property owners have to do now is pay an annual fee for their continued private use of this public space. And that annual fee is not based on the current assessed value of the surrounding properties.

The public property in question is the E. Mercer Street road end, which is located off of 39th Avenue E. in the area several houses to the north of the E. Harrison Street public road end, better known as Hidden Beach. This section of 39thAvenue, just south of the Seattle Tennis Club, is known to locals as the bottom of “Devil’s Dip.” Although Mercer Street actually peters out well to the west of 39th, its stub street end on Lake Washington represents more than a quarter acre of prime Madison Park waterfront. At 120-feet wide, it is twice the width of the Lake Washington lot which abuts the road end on the south side.

Private encroachment on public property usually generates a significant level of public controversy and media attention. Just down the road and around the corner from the E. Mercer Street road end, for example, lies Viretta Park. Many will recall the public outcry in the 1990s that resulted from the supposed encroachment of a neighboring homeowner, Starbucks CEO Howard Schultz, into the Park’s public space with his landscaping, driveway, and wall. That brouhaha ultimately involved the City Council and the Courts, and Schultz ultimately exited the property. Currently, there is well publicized dustup underway in Laurelhurst over a hedge which only partially obstructs a waterfront road end there. That encroachment benefits a property once owned by Bill Gates, which is currently owned by his sister, Libby, and her husband. Several Laurelhurst residents are up in arms that even a minor private encroachment on that public space has been allowed to continue.

The conversion of the E. Mercer St. road end from public space to private use has never received the kind of media focus that has been generated by these other encroachments. This may simply be due to the fact that very few Madison Parkers are aware that the property in question even belongs to the public. One longtime resident, who lives just down the street from the road end, tells us he cannot remember the public ever having access to the site in the more than 50 years he’s lived there. When a group of community activists from Madrona attempted to get the City to return it to public use several years ago, the E. Mercer St. road end did achieve a bit of notoriety; but there was virtually no media coverage of the group’s efforts. In any event, the City rejected the group’s public-use challenge.

We made a Public Disclosure request to the Seattle Department of Transportation (SDOT) to learn the process by which the public has been legally excluded from this public waterfront site. We also questioned Brian de Place, SDOT’s current Manager for Right-of-Way Management/Street Use, about the situation. What we learned from our investigation is that while the City’s official policy is that “the highest and best use of these street ends is for public use,” there are exceptions. The E. Mercer St. road end is probably as extreme of an exception as is possible, since it involves the complete abandonment of public use.

Here’s a little history of the City’s attempt over the past few years to deal with private encroachments on waterfront road ends. There are 149 such road ends within the City limits, six of which are located in Madison Park. In 1996, the Seattle City Council passed a resolution stating that it is City policy that “Shoreline street ends…shall be preserved as public rights-of-way.” The resolution, however, was strangely silent on the issue of whether existing private encroachments on these road ends must be removed, and no procedure was established for determining when private usage of a public road end could be permitted.

This created an ambiguous situation, which the Council sought to clarify in a 1999 ordinance, which reaffirmed that the City’s goal was to “keep adjacent property owners from encroaching on the public’s shoreline street ends,” but then went on to outline the procedure by which existing encroachments would be permitted through the payment of an annual fee. The amount of the fee was to be based on the size of the encroachment in square feet, the percentage likelihood of the public wanting to use the site (the demand/probability factor), the extent to which any barrier on the site impeded public access (including visual access), and the estimated value of the land per square foot. An annual rate of return (the “land capitalization rate”) was also to be factored in.

The idea was to use the fees that are collected to fund the City’s shoreline street-end management program, including paying for improvements, the inspection of road ends, and the notification to property owners of any encroachments. The SDOT was directed to establish a policy for enforcing the new ordinance, which it did in 2000.

Now, to return to the E. Mercer St. road end. In July of 2000, the City notified the encroaching property owners to the north and south of the road end that they could either apply for a Shoreline Street End Permit or remove the barriers that existed to the public right of way. The letter from SDOT’s Street Use Division included this statement of the City’s philosophy: “Although the ultimate goal is to remove all private uses of these street ends, the permit process acknowledges some private uses will continue. This permit process provides a means to review and approve private uses, as appropriate, until the property can be developed for public use.” Both property owners chose to keep their barriers in place, and from that point forward they have been paying annually for the continued right to block public access to the waterfront at E. Mercer.

Initially, the annual private-use fee amounts were $28,080 and $21,600 respectively, the property owner to the north having encroached on 7,800 sq. ft. of public shoreline and the southern owner having encroached on 4,800 sq. ft. It appears that these fees were not adjusted in any way for seven years, but in 2007 the amounts were set at $35,100 and $21,600 respectively; and those are the annual fees the property owners are paying today. The increase in the fee for the northern property owner was based on the City’s evaluation that the barrier to public access had increased from 80% in 2000 to 100% by 2007.

It is not clear, however, that the City has correctly determined the permit-fee amounts for the E. Mercer Street encroachments. According to the City’s stated guidelines for calculating the permit fees, “values are generally based on averages of assessed values for waterfront properties within like areas.” But SDOT in 2000 assigned a value of only $90 per sq. ft. to the area of encroachment. This assumed land value was never updated when any of the ten subsequent permit renewals occurred, and it is significantly lower than the property values set by the King County Assessor for the neighboring properties. Indeed, the 2010 assessments for the 14 waterfront properties in Madison Park along 39th Avenue E. average $467 per sq. ft.

The 12,600 sq. ft. of public property at the E. Mercer Street road end, based on King County’s assessment of the “like properties” in the neighborhood, would be valued at almost $6 million. However, based on its permit calculations, SDOT’s estimate of the value is only $1.1 million. Quite clearly, if SDOT used a factor based on the actual average assessed value for the area’s waterfront properties, the permit fees of the encroaching property owners would be substantially higher than what the City is receiving.

SDOT’s Brian de Place acknowledges that the City’s estimate of the road end’s value for permit purposes is not in line with current property values. He states that under the current ordinance, the City is not allowed to use King County Assessor data to determine value or to update values once the “City Assessor” has made the original site-specific determination, in this case ten years ago. A proposed change in the ordinance to be introduced next year, de Place notes, will allow the City to increase the permit fee amounts to take into consideration the current values of surrounding properties. If the existing $467 per sq. ft. surrounding-property value were used in calculating the encroachment-permit fees, the annual amounts paid by the two property owners would increase to $182,130 and $112,080 respectively.

According to one of the abutting-property owners, however, the road end is not being undervalued by the City. He says the property could never be built on because a house there would violate current waterfront building regulations concerning setbacks from the waterline and protection of neighbors’ views. If the property could not be built on, he argues, it has little or no value; and the City should therefore not look to the value of neighboring properties when determining the permit fee.

He also points out that neither he nor the property owner to the south created the situation at the road end. They each bought their properties when the encroachments had already occurred. After reading a draft of this posting he responded that “I think the issue is far more nuanced than you make it out to be.” He noted, for example, that the City has no money for upkeep of another public road end, there’s inadequate parking available on the street, and past illegal activity at Hidden Beach offers a warning of what the neighbors can expect if E. Mercer St. is opened up. Moreover, the City is getting some badly needed funds for the street-end program as a result of encroachment-permit revenues.

“I get charged a fee, and I pay it,” he told us. “I don’t control the fee, I don’t control how SDOT works, I don’t control who runs the city. I just get my bill and pay it, just like I pay my property taxes and my light bill. After I bought the house the city imposed the policy you are writing about. I was given the choice of paying or not paying. I chose to pay. So I think that a journalistic slant that tries to make it look like the homeowners cut some side deal with the city implies proactive intent on the homeowner’s part. The truth is that the city changed its policy and notified us and gave us a choice.”

The City, of course, could change its policy again and decide to open the road end to public use. That is the ultimate goal of the street-end policy, after all. But selling the land to the surrounding property owners is not an option. The idea has been broached, but according to de Place, selling the land could only occur after a “street vacation” in which the City would first have to certify that the site could never be used for public purposes. That’s not going to happen, he told us.

For now SDOT is happy just to collect its permit fees and look forward to receiving even higher revenue from the road end when the new ordinance is finally adopted. De Place notes that the goal of City policy is being advanced by the permit process, which since its adoption in 2000 has resulted in the reduction of shoreline encroachments from 93 to just 34. He expects that trend to continue. If so, perhaps one day there will be a sixth road end in Madison Park that the public can not only own but enjoy.

[Graphics: Upper photo shows the view from the southern portion of the roadend. Aerial photo, from Google Earth, shows the extent of the public property on the waterside, currently enclosed by private property owners. The middle photos show the obstruction of the road end as viewed from the street side, on the south and north, respectively. The bottom photo shows the entrance to the public road end from the private property to south. The map shows the six publicly owned road ends in Madison Park.]

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Who am I?

I am a longtime Seattle corporate banker who is at heart a frustrated journalist. A graduate of Roosevelt High School and the UW (where I served as editor of The Daily), I have been a Madison Park resident since 2002.

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Seattle's Madison Park is bounded by Lake Washington Boulevard E. on the West and South (to the intersection with 39th Avenue E.) and by Lake Washington and Union Bay to the East and North respectively. Washington Park and Broadmoor are Madison Park enclaves. The blog's coverage area also includes the businesses and residential units in Madison Valley along E. Madison Street.

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This is a blog about Madison Park (Seattle). Commentary and opinions are those of the author unless otherwise expressly stated. Aerial photo courtesy of the Seattle Municipal Archives.